Wheat markets maintained gains.

• Chicago wheat July contract up US6.25c/bu to 520.75;
• Kansas wheat July contract up 6.5c to 470.5c;
• Minneapolis wheat July contract up 5.75c to 525c;
• MATIF wheat September contract up €1 to €188.25/t;
• Corn July contract down 1.75c/bu to 325.75¢;
• Soybeans July contract down 6.25¢/bu to 840.75¢;
• Winnipeg canola July contract up $C0.40 to $461.10/t;
• MATIF rapeseed August contract up €0.5/t to €369.75/t;
• Brent crude July contract up US$0.04 per barrel to $35.33;
• Dow Jones index down 18 to 25383 ;
• AUD firmer at $0.6665;
• CAD firmer at $1.3766;
• EUR firmer at $1.1114.

Markets

In the wheat pits Chicago settled up 6.25 usc/bu closing at 520.75usc/bu, Kansas was 6.5 usc/bu higher to settle at 470.5usc/bu, while Minni rallied 5.75 usc/bu to go out at 525usc/bu. Corn fell -1.75 usc/bu to go out at 325.75usc/bu while Beans were down -6.25 usc/bu to settle at 840.75usc/bu WCE Canola rallied 0.4 CAD/mt closing at 461.1CAD/mt with Matif Canola finishing higher by 0.5 Eur/mt. In outside markets the Dow Jones fell -17.53 points, Crude was up 1.78 bbl the Aussie was 0.0029 points higher to settle at 0.66656, the CAD rallied 0.0008 while the EUR gained 0.0028.

With widespread unrest spilling into the American streets a new challenge presents itself to the Trump administration. George Floyd protests have been running for 6 days now and have become increasingly violent, forcing nearly 40 cities to impose curfews which are being enforced by the National Guard. What this means for financial markets is unclear. The extent of protests and unquestionable passion clearly reveals an underlying discontent with the wider racism stance in America. Does this lead to selling pressure in equities or is this seen as a social issue, not affecting company valuations? At the time of writing Dow futures were only off 189 points.

Wheat futures finished the week stronger and managed to print a positive weekly close. The USDA posted solid wheat sales over the week which came as a surprise given current price spreads. New crop wheat managed just under 500,000t of sales which was well above the average trade guess. This is significant given the ongoing debate around both the EU and Black Sea wheat production. Egypt has been exceptionally quiet over the last 6 months which starves the market with wholesale price discovery. Working fair value today into GASC is a challenge. Origins such as Romania are definitely struggling, French crop condition ratings are well below last year and Russian cash has not broken yet. However, the demand side of global balance sheets are slower to move than the supply side and we still have some work to do working out what the COVID lockdowns really mean.

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Australia

Wild weather pushed through the southern states over the weekend with high wind gusts and rain. The Lower Eyre Peninsula region received up to 12mm (recorded at Cummins) while the other areas of the Upper EP recorded 5mm. More scattered showers continued to push through the South East of South Australia and into Victoria topping everything up to complete the May totals. The new crop market finished the week firmer on Friday $3-5/t while the ASX January contracts closed the week with wheat settling at $306/t and barley stronger on the settle at $243.50/t. Crop conditions continue to power through, particularly in the early planted ground. Southern growers are now starting to apply their first application of urea, while planting through the north continues to steam ahead and looks set to continue for the next few weeks.

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